10 Funds to Buy for FAANG Exposure
Does "FOMO" - fear of missing out - have you down? If you're in the stock market but too scared of tech stocks, you might be feeling a twinge of regret right now.
The famous FAANG stocks - Facebook (FB), Amazon.com (AMZN), Apple (AAPL), Netflix (NFLX) and Google parent Alphabet (GOOGL) - returned 49% on average in 2017. These companies simply crushed the Standard & Poor's 500-stock index, which gained a bit more than 19% last year.
If you're worried that these gains are divorced from fundamentals, you're barking up the wrong tree. All of these companies are growing revenues year-over-year, and all but Amazon are on pace for year-over-year profit gains (Amazon has been open about its reason for earnings declines: heavy investment into Amazon Prime content, warehouses and other improvements).
What's more, the price investors are paying for that growth is conservative relative to the broader market. James Wang, internet analyst at ARK Investment Management, sees many valuations for tech stocks being lower than the broader market. "For example, Facebook is growing revenue at 47% but trades at P/E of 33. It's much cheaper than the S&P 500 average of 4% growth and 26 P/E," he says, noting that investors can buy FAANGs' growth for cheaper than the broader market's growth.
You can access these stocks
